Correlation Between Bank of America and Kornit Digital
Can any of the company-specific risk be diversified away by investing in both Bank of America and Kornit Digital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank of America and Kornit Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Kornit Digital, you can compare the effects of market volatilities on Bank of America and Kornit Digital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank of America with a short position of Kornit Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Kornit Digital.
Diversification Opportunities for Bank of America and Kornit Digital
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Kornit is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Kornit Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kornit Digital and Bank of America is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank of America are associated (or correlated) with Kornit Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kornit Digital has no effect on the direction of Bank of America i.e., Bank of America and Kornit Digital go up and down completely randomly.
Pair Corralation between Bank of America and Kornit Digital
Considering the 90-day investment horizon Bank of America is expected to generate 2.45 times less return on investment than Kornit Digital. But when comparing it to its historical volatility, Bank of America is 2.48 times less risky than Kornit Digital. It trades about 0.29 of its potential returns per unit of risk. Kornit Digital is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,363 in Kornit Digital on August 31, 2024 and sell it today you would earn a total of 773.00 from holding Kornit Digital or generate 32.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Kornit Digital
Performance |
| Timeline |
| Bank of America |
| Kornit Digital |
Bank of America and Kornit Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Kornit Digital
The main advantage of trading using opposite Bank of America and Kornit Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Kornit Digital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kornit Digital will offset losses from the drop in Kornit Digital's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| Kornit Digital vs. Flowserve | Kornit Digital vs. Franklin Electric Co | Kornit Digital vs. Watts Water Technologies | Kornit Digital vs. Gorman Rupp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |